Due Diligence Requirements for Purchasing an Existing Business

If you want to become involved in business as an owner, purchasing an existing business is an excellent way to avoid many of the challenges of starting your own company. Purchasing a current business, however, does present several responsibilities for the business owner that must be addressed immediately. You should not enter into any business agreements or transactions without going through these steps and verifying all information through your business law attorney.

First, you will need to obtain any current and necessary permits. With an established business, you can avoid the lengthy process of filing and waiting for permits, but you should also verify that the permits in place align with what you’ll be doing with the company. If you plan to expand the company into new territory or provide new services, you’ll be responsible for investigating whether any additional permits are required. Remember that you’ll be required to maintain necessary permits at the local, state, and federal levels.

Second, if you intend to operate the business in a particular area (this applies specifically if you are purchasing the equipment, rights to, and other materials associated with the business but not the physical location) you will need to meet zoning requirements. You can learn more about basic zoning laws from the SBA.

Finally, take care to review whether any environmental issues will affect your business. The EPA manages a Small Business Gateway to give you further information about whether environmental concerns will need to be considered in the establishment or development of the business you are purchasing.

Without addressing all three issues above, you put yourself in a dangerous situation as the buyer of an established business. Purchasing an existing company should be done under the guidance of your Illinois business law attorney.